Lawmaker-backed report accuses UPMC of 'anti-competitive' monopoly, calls for policy intervention

UPMC is in the crosshairs of two Pennsylvania legislators following a critical report from anti-monopoly nonprofit group the American Economic Liberties Project (AELP) that accused the system of rampant growth and “anti-competitive behaviors.”

Published Thursday, the report highlights the Pittsburgh-based organization's growth from 12 hospitals to 40 within the past decade as well as its status as the state’s largest nongovernmental employer with 92,000 workers.

In Pennsylvania’s Allegheny County specifically, the integrated system controls 67% of the county’s 45,000 hospital employees and 60% of its total licensed hospital beds, according to the report. Within the city of Pittsburgh, which is the seat of Allegheny County, UPMC employs 76% of all hospital employees and 71% of all licensed hospital beds, per the report.

Citing Federal Trade Commission (FTC) analyses, AELP wrote that such hospital consolidation results in higher prices, worse outcomes and “considerable power over workers, which [UPMC] wields to keep wages low, conditions unsatisfactory, and prevent union organizing,” the group wrote.

“This is known as ‘monopsony’ power, or the power of buyers—whether they be buyers of products or labor—to drive down the prices suppliers and workers receive. Buyers may even be able to dictate prices directly when they are the only purchasers in a given market, leaving suppliers and workers with little bargaining power,” they wrote.

The report goes on to describe a “union-busting campaign” in which “any worker who attempts to organize is surveilled, harassed, intimidated and ultimately fired” by UPMC. It also touched on the system’s role as a major insurer in the region, citing a 32% market share in western Pennsylvania.

The report concludes with a range of federal, state and local policy recommendations “to reform the healthcare industry in Western P.A.,” which include passage of the state’s Open Markets Act and expanding the oversight power of the FTC when reviewing nonprofit hospitals.

A representative of UPMC told Fierce Healthcare the system needs more time to review the report’s claims before giving a detailed rebuttal but noted that much of the data and analyses cited in the report “have been reported in the past and debunked.”

The representative also highlighted a Jan. 12 announcement that UPMC has launched a plan to increase its minimum starting wage to $18 per hour by the start of 2025 or 2026, depending on their location. The minimum wage in Pennsylvania is currently $7.25 per hour.

Still, the report has the backing of two Democratic lawmakers: Pennsylvania Rep. Sara Innamorato and Congresswoman Summer Lee. Implementing the report’s recommendations would be a major step toward supporting healthcare workers harmed by UPMC’s “relentless” growth and market dominance, the pair said late last week during a virtual joint presser as well as in the report’s penned introduction.

“We must reintroduce significant competition into Western Pennsylvania’s healthcare market and break UPMC’s monopoly power,” the lawmakers wrote in the report’s introduction. “This will require passing new laws designed to promote worker- and consumer-friendly markets, as well as ensuring courts and regulators enforce existing laws. The result will be better jobs for workers and better health outcomes for the more than 1 million people in the region.”

AELP, which prepared the report, describes itself as a nonprofit, nonpartisan organization that supports anti-monopoly policy changes. The group says it does not accept funding from corporations and instead relies on “contributions and grants from foundations and individuals.” It was founded in 2020 and is led by Sarah Miller, formerly the deputy director of the Open Markets Institute.